Sacramento daily record-union. [volume] (Sacramento [Calif.]) 1875-1891, 1887-05-21

schools within the city of Sacramento, and
therefore was Tlthin the protecting egis of
the Constitution. AS it is the law which
enters into and forms a part Of every con-
tract, even if Sections 35 So and IS of
tie Act of 1858 were broad enough to in
clude within their provisions any part of
the city school fund, the Constitution. as
the supreme law of the land, enters the
portals Of the contract of the plaintiff be-
fore them, and forbids them to enter or en-
croach upon the sacred ground. 1t was be-
yond the constitutional power of the Leg
islature to appropriate any part of the city
school fund to the payment of the claims
OF the plaintiff. 1t follows that the
plaintiff is not entitled to have any OF the
city school fund transferred to the interest
and sinking fund.
FIRE DEPARTMENT AND wATER-woRKs
FUNDS.
Secondly-There was nc such fund as
the fire department fund or the water
works fund mentioned in Section 80 of the
Act of 1858, for which reason the plaintiff
can have no shadow of claim to any sur
plus which might remain in those funds
at the close of any fiscal year. Section
SO only assumes to direct the surplus that
should remain at the close Of any fiscal
year in the funds mentioned in Section 80
to be transferred to the interest and sink
ing fund provided in such thirty fifty sec
ton, and none other. Hence the plaintiff
is not entitled to have the surplus in either
of those funds transferred to the interest
and sinking fund for his benefit.
THE CONTINGENT OR GENERAL FUND.
And lastly, we come to the consideration of
the right of the plaintiff to any surplus that
might have remained in the contingent
| fund, provided for in Section 50 of
the Act of 1885, under which the bonds
| and interest coupons of the plaintiff
were issued. Section SO of the Act.
as we have seen, provided that if at the
close OF any fiscal year there should re-
main surplus in either of the funds men
toned in Section 3d. such surplus moneys
shall be transferred to the interest and
sinking fund provided for in such 35th
section. The bonds and interest coupons
issued under the Act were charge upon,
and payable out of, that interest and sink
ing fund. Clothed in plain English this
is the contention of the plaintiff: These
sections entered into and formed part Of
those bonds and interest coupons, and that
as a holder Of some of them he had and
still has vested interest in any surplus
that might by any contingency remain in
| the contingent fund at the close of any fiscal
year, which placed it beyond the power of
| the Legislature to change, modify or abol-
ish such contingent fund, or TO impose new
or additional charges or burdens upon it.
lest no surplus should arise, even though
the legitimate demands of the increasing
| rlnnnl lott onA tho
necessities of the city should REQUIRE the
exercise of such legislative power.
| Ii this proposition can be maintained.
then, indeed, the right arm of the city
government is paralyzed. There is two
fold aspect in which to view this PROPOSE
ton:
First-In this State municipal cor
poration is subordinate part of the State
government, organized for the more con-
venlent administration of the local affairs
of a particular district and deriving its
powers wholly from the Legislature, to
whose general control and supervision it is
subject, and the Legislature, in its own
turn, owes its existence and derives its
power from the sovereign will of the peo-
pie, made manifest in their written Con-
stitution.
That Constitution, in defining the powers
of the Legislature to create municipal COR
porations and in prescribing the mode of
their creation, in Section 81 of Article ".
declares that: Corporations may be
formed under general laws; but shall not
be created by special Act, ercept for MUM
opal purposes. All general laws and special
Acts passed pursuant to this section NAV
be altered from time TO time, or repealed"
Then, municipal corporation created by
authority of this provision of the Consti-
tuition derives all its powers, rights and
franchises from the special Act by which
it was created, and has no other powers,
rights or franchises than those conferred
by such Acts; and the special Act in ques-
ton, by the express reservation contained
i'll that constitutional provision, may be
altered from time to time or repealed by
the Legislature.
That provision of the Constitution en-
tered into and formed a part of the bonds
and interest coupons, as well as the Act
under which they were issued, and, as the
Constitution is superior to the Act of the
Legislature, it follows that in any respect
wherein the Act conflicts with the Consti-
tuition, the Constitution must prevail and
the power Of the Legislature to alter or
repeal the powers, rights and franchises Of
the corporation is as obligatory upon the
bondholder as it would have been if a.
stipulation had been written on the
face of the bonds or interest coupons
to the effect that the corporation or Leg
islature might alter or rescind them, and
when such right is reserved in contract
the exercise of it does not impair the con-
tract in any sense, because the right to al.
ter or rescind is as obligatory as any other
| stipulation in the contract. If n stipula-
ton were deliberately written in a con-
tract made between individuals, that one
party TO the contract should have the
right to alter or rescind it in his discre-
ton, who would doubt the validity OF such
a stipulation? No one. Would the ex-
exercise of the right impair the obligation
OF the contract No Such stimulation
measures the extent of the obligation.
Each party is bound to take notice of all
the written terms or stipulations in
written contract to which he is a party.
and is bound thereby; and so as ali
persons are presumed to know the law.
they are presumed to know the extent O.
the constitutional power Of the Legislature
to create municipal corporations, and to
control, alter or abolish their powers, rights
and franchises, and the exercise of such
power by the Legislature to restrict or en-
| tirely withdraw from such municipal cor
porations the power Of taxation or other
power, does not impair the obligation of
any contract within the meaning of the
Constitution of the United States, though
without the power of taxation NUM-
cipality cannot raise any revenue to sup
port its government or pay its debts. As
to the power of the Legislature over NUM-
cipal corporations, Judge Cooley in his
work on Constitutional Limitations %.
$50, states the rule of the constitutional
law thus: "Where the State EMPLOYS Of
Iicers or creates municipal corpora
tions as the mere agencies of gov
eminent, 1t must have the power
to discontinue the agency whenever it
comes. To lie regarded as no longer import
ant; the trainers of the Constitution did
not intend to restrain the States in the
regulation of their civil institutions,
adopted for their internal government
They may, therefore, discontinue offices
and abolish or change the organization of
municipal corporations at any time, ac-
carding to the existing legislative view of
State policy, unless forbidden by their own